415 units at City Quay, Ellerman Road, Liverpool, L3 4FD MAN/00BY/LDC/2022/0064
DECISION
Compliance with the consultation requirements of section 20 of the Landlord and Tenant Act 1985 is dispensed with in relation to works comprising the construction of a building on site to provide a suitable and permanent base for contractors and/or employees of City Quay which includes recreational space, a kitchen, washing facilities and storage.REASONS
[1]On 22 December 2022, an application was made to the First-tier Tribunal (Property Chamber) (“the Tribunal”) under section 20ZA of the Landlord and Tenant Act 1985 (“the Act”) for a determination to dispense with the consultation requirements of section 20 of the Act. Those requirements (“the consultation requirements”) are set out in the Service Charges (Consultation Requirements) (England) Regulations 2003 (“the Regulations”).[2]The application was made by City Quay Management (2001) Company Limited and relates to premises known as City Quay, Ellerman Road, Liverpool, L3 4FD (“the Properties”). The Applicant is the management company for the Properties. The Respondents to the application are the long leaseholders of the 415 units. A list of the Respondents is set out in the Annex hereto.[3]The only issue for the Tribunal to determine is whether or not it is reasonable to dispense with the consultation requirements.[4]The works in respect of which dispensation is sought concern the following works to construct a building to provide a suitable and permanent base for contractors and/or employees of City Quay at the site of the Properties:a. Provision of site security/fencing.b. Carrying out of generic and dynamic risk assessments, provision of documents, insurance cover and health and safety documentation to City Quay.c. Provision or installation and removal of scaffolding.d. Installation of new drains to meet existing drainage system.e. Excavation of site to prepare for f strip foundations and pour concrete foundations.f. Installation of an insulated concrete slab with a 70mm screed finish.g. Building of shell walls using internal block work and external brickwork to match existing surrounding buildings.h. Provision of wooden roof trusses with flat plain concrete roof tile including all plastic soffits/fascia/rainwater goods.i. Provision of insulation within the roof space.j. Provision of Upvc Windows and doors.k. Provision of timber stud wallsl. Completion of all plastering.m. Provision of all electrical wires, installations, plugs and sockets, plus associated connections.n. Carrying out of all plumbing requirements, including the provision of pipes, connections, new bathroom/toilets and shower.o. Carrying out of tiling to the shower cubicle and above the hand basin in the toilet using a plain white tile.p. Provision of the second fix joinery throughout the building, supplying and fitting kitchen units, architraves, skirting boards and doors.q. Carry out all panting throughout the new building.r. Provision of all flooring coverings, including provision and fitting of carpets and vinyl flooring.[5]Each of the Respondents have been given notice of the application and have been sent a copy of the Applicant’s supporting evidence. They have also been provided with a copy of the case management directions issued by the Tribunal on 28 April 2023. The directions required any Respondent who opposed the application to notify the Tribunal of their objection within 21 days of receipt of the Applicant’s bundle of documents. Ten Respondents have raised queries with the Applicant surrounding the works in response, however no objections to the application have been received.[6]I have determined this matter following a consideration of the Applicant’s case, but without holding a hearing. Rule 31 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 permits a case to be dealt with in this manner provided that the parties give their consent (or do not object when a paper determination is proposed). In this case, the Applicant has given its consent and the Respondents have not objected. Moreover, having reviewed the case papers, I am satisfied that this matter is indeed suitable to be determined without a hearing: although the Respondents are not legally represented, the application is unopposed and the issues to be decided are readily apparent.[6]The Tribunal did not inspect the site of the Properties, but I understand there to be 13 separate purpose-built blocks with an average of 20-30 units save for CQ6 which contains 66 units. Grounds for the application[7]The Tribunal is advised that the Applicant is required to build permanent facilities for full time contractors, employed by City Quay, to utilise as an office whilst managing and carrying out maintenance and work required at the site. Notably, works potentially required to the building following a fire risk assessment. The Applicant’s case is that they have applied to the Tribunal for dispensation of the consultation requirements due to the risk of prejudice to the leaseholders if works did not progress urgently. The Applicant was unable to obtain a quote from more than one contractor who could undertake the necessary work in 2022 to ensure that they did not breach their obligations to the full-time staff. The Applicant highlights that the quote from the contractor REN Building and Maintenance Limited was competitively priced, however it was only available to accept for a short window. According to the Applicant, the cost benefitted all leaseholders and would not cause any financial detriment to them, which are two factors that were considered at a board meeting when deciding to initiate the works without adhering to the consultation requirements. The works have therefore already commenced. The Applicant states that they intend to pay for the works using money from reserves, as agreed in the AGM in 2021, which is the most cost-effective way to proceed. Consequently, the leaseholders shall not be asked to financially contribute further to fund the works costing £114,000 plus VAT.[8]The Applicant submits that if a consultation was conducted, the contractors would not honour their original quote and therefore there could have been additional costs and potentially no contractor to carry out the urgent works. Law[9]Section 18 of the Act defines what is meant by “service charge”. It also defines the expression “relevant costs” as: the costs or estimated costs incurred or to be incurred by or on behalf of the landlord, or a superior landlord, in connection with the matters for which the service charge is payable.[10]Section 19 of the Act limits the amount of any relevant costs which may be included in a service charge to costs which are reasonably incurred, and section 20(1) provides: Where this section applies to any qualifying works … the relevant contributions of tenants are limited … unless the consultation requirements have been either–(a) complied with in relation to the works … or(b) dispensed with in relation to the works … by the appropriate tribunal.[11]“Qualifying works” for this purpose are works on a building or any other premises (section 20ZA(2) of the Act), and section 20 applies to qualifying works if relevant costs incurred on carrying out the works exceed an amount which results in the relevant contribution of any tenant being more than £250.00 (section 20(3) of the Act and regulation 6 of the Regulations).[12]Section 20ZA(1) of the Act provides: Where an application is made to the appropriate tribunal for a determination to dispense with all or any of the consultation requirements in relation to any qualifying works … the tribunal may make the determination if satisfied that it is reasonable to dispense with the requirements.[13]Reference should be made to the Regulations themselves for full details of the applicable consultation requirements. In outline, however, they require a landlord (or management company) to:• give written notice of its intention to carry out qualifying works, inviting leaseholders to make observations and to nominate contractors from whom an estimate for carrying out the works should be sought;• obtain estimates for carrying out the works, and supply leaseholders with a statement setting out, as regards at least two of those estimates, the amount specified as the estimated cost of the proposed works, together with a summary of any initial observations made by leaseholders;• make all the estimates available for inspection; invite leaseholders to make observations about them; and then to have regard to those observations;• give written notice to the leaseholders within 21 days of entering into a contract for the works explaining why the contract was awarded to the preferred bidder if that is not the person who submitted the lowest estimate. Conclusions[14]The Tribunal must decide whether it was reasonable for the works to go ahead without the Applicant first complying with the consultation requirements. Those requirements are intended to ensure a degree of transparency and accountability when a landlord (or management company) decides to undertake qualifying works – the requirements ensure that leaseholders have the opportunity to know about, and to comment on, decisions about major works before those decisions are taken. They also ensure that leaseholders are protected from paying for inappropriate work, or from paying more than would be appropriate for necessary work. It is reasonable that the consultation requirements should be complied with unless there are good reasons for dispensing with all or any of them on the facts of a particular case.[15]It follows that, for it to be appropriate to retrospectively dispense with the consultation requirements, there needs to be a good reason why the works could not be delayed until the requirements had been complied with. The Tribunal must weigh the balance of prejudice between, on the one hand, the need for swift action and, on the other hand, the legitimate interests of the leaseholders in being properly consulted before major works begin. It must consider whether this balance favours allowing the works to be undertaken immediately (without consultation), or whether it favours prior consultation in the usual way (with the inevitable delay in carrying out the works which that will require). The balance is likely to be tipped in favour of dispensation in a case in which there is an urgent need for remedial or preventative action, or where all the leaseholders consent to the grant of a dispensation.[16]In the present case, it is clear that the works concerned should have been undertaken as soon as possible, not only to provide suitable facilities on site for full time staff to allow them to complete maintenance and remedial works to the Properties, but also to ensure that the most competitive price available at the time could be achieved. While the statutory consultation requirements have not been complied with, the Respondents have previously been informed about the proposed works and given the opportunity to raise questions. In reaching my decision, I have had regard to the fact that no objections were raised by the Respondents when provided with the opportunity to do so. There is no evidence that the Respondents have been, or would be, prejudiced by the lack of compliance with the consultation requirements. I therefore conclude that unconditional retrospective dispensation should be granted.[17]Nevertheless, the fact that the Tribunal has granted retrospective dispensation from the consultation requirements should not be taken as an indication that I consider that the amount of money deducted from the reserve fund as a result of the works is likely to be reasonable or, indeed, that such charges should be payable by the Respondents. I make no findings in that regard. Signed: J Holbrook Judge of the First-tier Tribunal Date: 26 July 2023 ANNEX (List of Respondents) Mr Richard M Langley Mr Lee D Harten Ms Sarah J Allen Mr & Ms Richard Ward Mrs P Yadav Mrs Pauline Kean Mr Phillip Levenson & Miss E J Fitzsimons Mr David Taylor Miss Nicola Dunne Mr Stuart Gelling Thomas Latimer Mr Paul Baker Mr Derek Campbell Ms A Shewhorak & Ms K Parnell Mr & Ms Jonothan & Maria Vaughan & Raisey Mr J McCafferty Ms Fabiha Zaman Miss F Wilson Miss T A Greenall Ms Stephanie Jane Palmer Mr Terence Anthony Clarke Mr T Radia Dr S R Gutha Ms Karen Bradbury Mrs Pia Clay Florin Ciurariu Mr John K Birchall Mr Ian Carter Mr & Mrs P J Marshall KADNC Wijekoon Miss Niamh Whitehouse Mr T J F Nixon Mr Michael Burns Alin-Razvan Costache Mr Kim Cheung Mr Keith Thomas Baines Mr & Mrs David & Rose Gale Mrs J McDonough O Smith Mr S K Kok Ms S Subhani Mrs Justine Clare Mr Alan Quinn Ms J Tse Mr C K Patel Mr Jack Murray Miss S W Cheung Mr Jaques Loguellou Mr & Miss Errol & Kim Buckeridge & Booty Mr Peter Vickers Mrs Julie Wright Mr W Akinrinola Mr & Mrs Downes Mr Vincent Ferguson Ms Aysha Salam Ms Joanne Kershaw Mr A Rogan BCP Beta 2 Ltd Mr Stephen Crosby Mr & Mrs D Vaja Mr Samuel Ashoo Mr & Mrs R Irving Mr Michael Binks Mr Ryan Macauley Dr & Mrs M Alexander Mr Candlin Katherine Bishop Hunt Agata Jedrzejewska Mr William Martin Ms L M Howard Mr & Mrs Birchall Mr David John O'Malley Laura Mary Perry Mr D Eccles Mrs Angela Carol Higham Mr & Mrs F J Davis Mr P Ghosh Ms Emma Caroline Pomford Mrs Gemma Garwood Mr L D Mildener Miss Carol Krenn Mr P R Trayler Mr Mark Andrew Bamford Miss Caroline Hayword Michael Thomas Doyle Mr Yousif Haithem Sulaiman Mr Warren J Bradley Ms Michele Woodward Mr Ian Christie Miss K Edwards Ms L A King Mr A Tattershall Bik Wah Linda Mok Christopher James Lettings Ltd Mr Jamey Todd Smith Mr Nicholas Mather & Ms Claire Bannon Ms S McLaughlin Hind Ahmed Mr A Dumbell BCPBETA3 Mr Jonathan Owen Mr A Hayes Katie Talbot Mr Aylen Mr G Smith Mr Terry Donnelly Mr Arthur Baas Mr R Patel Waterloo Dock Property LTD Ms Victoria Karkelanova Miss Chloe Jessica Booth Dr Christopher G Blanshard Mr David Sunderland Ms Louise Kissack Mr Zaid Esmail Mr Boleslaw Winiarski Mr J De La Rosa Dr S Jiwani Mr & Mrs K Burke Dr S Jiwani2 Mr David Holdsworth & Mr Jamie Muirhead Michael Christopher Clark Miss Hannah McGloin Jonathan Philip Bate Yoni Vant Zand Miss Ramena Farahi Mr G J Jones Dr A M Arain Ms L Gimbert Ms J Paton Miss T Clucas Mr S Nuttall Miss Anna B Bridge Mr Gary Lyons Mr W Judge Mr Douglas James Grimshaw Mr Alan Atherton Mr Sam Mawdsley Mr & Mrs R Seth Mr Philip Rooney Mr Davies & Miss Carver-McClintock Ms Stephanie Ioannidis Mr S J Hopkins Mr Yulun Wu Mr Paul & Vinod Tandon Ms Katie Stanton Mr Jason Taylor Mr Derek Campbell Mrs Lam Mr & Mrs F Andrade Ms Julie Warburton Ms Wendy Gilbert Mr J Donoghue Mr Geoff Williams Ms C M Wingate Miss L T Baker Miss Carol Metcalf Mr & Miss Edward and Charlotte Sands & Moran Mr S Rao Mr & Mrs D Grimes Ms P J Newey Mr D J P Higham Miss Katherine Maria Foster Mr M & I Ibrahim Mr Kazi Shahabuddin Miss Kelsie Williams Miss Julie Anne Featherstone Mr Christopher Jones Dr A K S Manoj Mr Neil Shaw Miss Penelope Jane Robshaw Mr Nicholas Bowley Mr & Mrs S Street Ms V A Williams Mr Ben Howen Mr Joel Berman Miss Jessica Small Mrs Sophia Wong Ching Hwai Ms M G P Raja Mr Brian Roche Mr & Mrs P T Whitty Mr A Starkey Mr P F Xavier Executors Mr P Lad (Deceased) Mr J L Cartwright Ms Y L Chan Mrs & Miss Prakash Miss Joanne Hale Mr & Mrs A K Zubair Ms C & K Boyce Mr T Brady Dr A Nair Mr A J Larkin Dr & Mrs W J Jones Mr Gianfranco Boccuzzi Mr Levi Tsi Lung Cheung Salvesen Properties Ltd Mr Mike Readitt Mr & Mrs K Harris Mr & Mrs K S Ward Ms S L Snow Miss M Delargy Mr & Miss James & Pamela Heaps & Edwards Mr N R Howard Mr & Mrs A Jennings Mr J Laya Gomaez Messrs P & Y Spratt Miss L Wilcox Mrs S Passmore Ms N Gimson Mrs P A Steen Mr & Mrs Michael Hart Mr G O'Flanagan Mr & Mrs G J Brandwood Mr & Mrs David Higham Mr U Gupta Mr & Mrs Colin Deane Messrs Eswaran & Kandeeswaran Hollie S Robb & Christopher P Mason Mr Geoff Williams Mr & Mrs Michael Hart Mr D Vaja Mr Richard Francis Ms Emma Wainright Mrs Denise Karen McEvoy Mr S O'Neill Ms Linda Adkins Ms Lorraine Romano Mr J Stone & Miss D J Rodaway Ms Anna Mary Dolby Miss Gemma Miller Mr & Mrs Bagnall Mr & Mrs G Deary Salvesen Properties Ltd Mr & Ms Greg & Joanna Martin & Cameron Dr M Vilalta Escoda Miss F A Ashaye Ms W C Derbyshire (formerly Mitchell) Ms Julie Beach Mr B R Barlow Mr E E S Alsayagh Matthew Diable Miss Emma Kristina Crosby Ms L A Bagshaw Ms Jane Hayworth Miss Aimee Catherine Wright Mr & Mrs Hicks Mr & Mrs G T Lacy Ms Jane Hayworth Messrs P & M Johnson Treherne Mr G Evans Mr M J Riley Mr Peter Martin Beckett Mr & Mrs D Marrs Mrs Gail Jones Mr & Mrs K Neilson Mr B Higgins & Dr S Meah Ms A Faulkner Lombard Business Centre Mr Mathew Carmichael Mr P L McCormick Mr & Mrs P Siddle Mr T Winn Morgan Mr Nicholas Adrian Pitt Mr & Mrs Stringman Mr Phillip Jones Mr James Leonard Miss Rebecca Louise Bailey Mr N Holden Mr & Mrs Hasson Mr Alexander Joseph Scanlon Mr P J Husband Mr Daniel Ankrah Mr F Renshaw Sophie Pennington Mr O Parkhouse Mr Daniel Cabezas VP Ferguson Ltd Mr PeiYuan Jiang Mr A Mashood Ms Cheung Miss Hollie Washington Mr N Goldstone Mr K E Wood Ms Leanne Jones Mr S Harding Mr V S Kwong Yip Ms S Thomas Ms Donna Maria Burke Mr William Range Miss T Barnes Mr & Mrs S Hothi Southernplus Ltd Mr P Marshall Reticent Holdings Ltd Mr & Mrs N Mitchell Mr Ben Stanley Mr C A Smith Mr C Barnes Mr & Mrs T Marshall Mr L Simpson Mr C G Goulding Mr & Mrs Y H Cheung Ms Jennifer Sandra Schmidt Southernplus Ltd Anvil Property Management Limited Mrs Carol Vassell Ms Eileen Jones Mr Scott Thomas Chorley Mr A Farrell Mr Chun Ting Lam Mr V Sood Mrs D Rubin Mrs Audrey McCurley Mr G Khanijau D Riach & R Anderson-Jones Miss J Wolfendale Dr John & Susan O'Malley Mr Shane Turner Mr Kevin James Foster Mr A Hunt Mr Kieran Swindells Mr A Komuravelli Mr Peter Simpson Mrs Wong Jan Souness Ms Sinead Burns (Was Magee) Mr A Sampat Mrs & Mrs B & J Dimeck Ms Diane Grant ICC Investments Ltd VP Ferguson Ltd Mr S Mitha Mr & Mrs A Shah Miss H Chandrashakar Mr Gary King Ms Janet Bailey Ms Gillian Rose Gale Ms J Markham Mr & Mrs S Khatri Fan & Jing Zhang & Ma Mrs Dipa Navinchand Shah Mr & Mrs D Higham Mr & Mrs Sandeep & Kajal Shah Mr L Singh Mr B Savadia Mr Dipti Vinay Shah Mr & Mrs D Jones Mr Sam Gibson Mr David Branum Mr & Mrs D Evans Mr R Sandhu BCP Alpha 2 Ltd Mr B Goodyear Bronica Gumbhir Wai Ting Tse Mr & Mrs Neven & Nives Kasic Mr P Hayes Mr & Mrs J Stephens Mr R Pollard Mr M John Mrs H Pryce Mr Darik K L Leung Mr & Mrs J Earnshaw Mr A Mediratta Mr R Sandhu Mr A Rasaratnam Mr S Hegarty Mr Stanley Davies Mr N Nixey Mr Anthony Whittaker Mr Steven Cook Mr A Warren Mr Zubar Mohsan Mrs J Nixey Mr & Mrs P Bowery Mr & Mrs K Duncan Mr Eddie Tickle Mr David Bailey Mr Marc Stanton Bennett Mr & Mrs J Brennan Mr Paul Bagnall Mr K Nijjer Mr B Vidarsson Messrs Bray & Cassell Mr Singh Mr C Skane Davis Dr Annette Graham Mr A Fradley Dr Morad Kamyab Mr Peter Bellamy Ms L Murrell Mr David Bailey Mr R Whitehouse Mr C Lakhanpal Miss Teresa Dennis Miss K Walsh Mr D S Dickenson Mr Graeme Jones Mr C J Smith Mr Paul Moses Mr V Koowaroo Mr Hilel Anthony Alhanshali Mr Brian Riley Miss Alison Graham Mr J Vogler Dr Rieka Taghizadeh Mr C Cullen Mr P Kettle Mr J Hewitt Miss I Mateides & Nigel Andrew Fulcher